City Council to consider Labor Peace Agreements Tuesday

On Tuesday, the City Council will debate adding a controversial requirement for restaurants and other food vendors who lease City-owned property to enter into a labor peace agreement (LPA) with a local union.

The requirement could impact everyone who sells food on The Santa Monica Pier from the Churroman cart vendor to Bubba Gump Shrimp Co.

The idea faces strong opposition from the Santa Monica Chamber of Commerce, arguing it threatens the livelihood of small business owners who cannot afford to go head to head with unions such as Unite Here Local 11 to secure a lease.

Tuesday’s discussion is agendized as a “study session” meaning the Council will hear from staff and the public and then give direction.

The proposed language, similar to a provision that regulates restaurants and other venders at LAX, would require business owners or managers to negotiate and then submit a LPA with a worker’s union as a condition of operating on the Pier, Downtown or the Santa Monica Airport.

The new LPA would go a step further than current lease requirements, which say tenants will not impede workers’ efforts to organize.

The new language was introduced by now-Mayor Ted Winterer and Councilmember Tony Vazquez and unanimously supported by the City Council during a meeting in Aug. 2016.

At the time, Mayor Winterer said an LPA would prevent a work stoppage caused by a strike or other labor action that could hurt City revenues. Every year the City makes about $4.5 million from leases to restaurants and other food vendors.

During the brief discussion, Councilmember Pam O’Conner directed staff to analyze the LPA’s potential effect on “mom and pop” businesses.

More than a year later, the City report found the new language would impact 27 out of 101 properties managed by the City. The vast majority of those tenants are small businesses with fewer than 25 employees (19 versus 8).

The Chamber sent a letter to the Council in advance of the discussion saying those small businesses would be under threat if the LPA was to be instituted.

“One of our primary concerns with the proposal is the competitive disadvantage that it would place on businesses on city property, relative to those on private land not subject to the new rule,” says the letter from Chamber president and CEO Laurel Rosen.

“Requiring an LPA would lead to longer periods of vacancy and a greater likelihood of corporate/chain occupants on important city locations that are not only significant to city revenue, but also to the fundamental character of Santa Monica.”

Business owners have also expressed concern labor organizations would have unilateral leverage in negotiating the LPA if it were required, and would burden the owners with the cost of hiring specialized legal assistance.

The new regulation could also impact hundreds of hosts, waiters, waitresses and cooks who work on the Pier and downtown.

The City has not experienced any work stoppages at City-owned properties and the impact of a required LPA on rental income and small businesses is “unknown and unpredictable,” according to a staff report by the City’s director of housing and economic development.

“As a group, the City Tenants employ a range of full- and part-time positions totaling approximately 600 employees annually,” the report by Andy Agle states.

The Airline Service Providers Association took the City of Los Angeles to court over the LPA requirements at LAX. This past summer, the Ninth Circuit Court of Appeals upheld the City’s right as landlord to set requirements for tenants on City-owned space.